Ask the Experts – The Fundamentals of Tax Filing

Question:​ As a restaurant owner, I want to make sure I’m properly prepared for tax season. What documentation should I be keeping to make the tax–filing process smooth and accurate? 

A: Thanks for reaching out, as this is a common question. To ensure a smooth and accurate tax-filing process, it’s essential to compile and maintain the following documentation throughout the year:

1. Tax Identification Numbers: 

• • Federal Employer Identification Number (EIN) 
  • State Business Identification Number (BIN) 
  • Personal Social Security Number (if applicable) 

2. Previous Tax Returns: 

• • Copies of the prior year’s tax returns (consider keeping up to three years of prior returns for reference). 

3. Financial Records: 

Accounting Spreadsheets, Ledgers, Journals and Reports: 

• • Balance sheet 
  • Income statement 

Business-Related Expenses: 

• • General office supplies 
  • Recurring operational costs (e.g., rent, utilities, subscription services) 
  • Business-related entertainment, travel and meals 
  • Marketing and advertising costs 
  • Professional fees (e.g., attorneys, consultants, accountants, bookkeepers) 
  • Insurance policy details 
  • Equipment and asset list 

4. Home Office Deductions (if applicable): 

• • Total square footage of the home and the square footage dedicated to office space 
  • Mortgage interest or rent payments 
  • Utility costs (e.g., gas, electric, internet, telephone) 
  • Home insurance policy/expenses 

5. Additional Documentation (if not using bookkeeping services or software): 

• • Detailed invoices 
  • Bank statements and credit card receipts 
  • Deposit slips 
  • Mileage logs 

6. Employee Documentation (if applicable): 

• • W-4 forms: Employee tax withholding selections 
  • I-9 forms: Verification of employee legal working status 
  • W-2 forms: Wage and tax statements for each employee 

7. Independent Contractor Documentation (if applicable): 

• • 1099-MISC forms: Summary of fees and payments for nonemployees